American Civil War

PEOPLE PROFITED, some unduly, from the Civil War as from all wars and other times of rapid expenditure of government funds. A common perception is that the corruption and taking of excess profits (profiteering) came about in part because the secretary of war, Simon Cameron, was a conniver and a hack whose sloppy practices allowed profiteers to foist on the government defective weapons, uniforms, and other equipment in violation of President Abraham Lincoln's order that all contracts be sent out for competitive bids.

Actually, it was somewhat more nuanced than that. There is little evidence about procurement and profiteering in the South, but profiteering presumably occurred there as it did in the North, especially during the war's early stages. The initial phase of war is chaotic, and until the system becomes ordered there will be those who take advantage. The system was designed for a much smaller force, a more leisurely pace, a shorter war. The initial procurement effort was haphazard, disrupting the civilian economy in the haste to field armies.

The federal expectation of the war need was 250,000 Union troops for maybe 90 days. The army reached 1.7 million before the war ended four years later. The new kind of war started while experts still debated whether to continue privateering and the sharing of prizes taken at sea. Profiteering occurred in every way anyone could imagine to make money off new technology: steamships, railroads, machine tools, and more complex weapons. Patent royalties, high salaries for executives, stock speculation and manipulation—these were new avenues as well. Shoddy millionaires arose, but before profiteering became outrageous, the procurement service federalized, organized, and streamlined.